What we’re also discovering is that insurance is complicated to buy. — Barack Obama

With open enrollment two months away, ObamaCare is gradually becoming newsworthy again, even if it is shrinking as a political issue[1]. Monday’s New York Times piece, “HealthCare.gov Is Given an Overhaul”, shows not only problems with ObamaCare, but with the party system and the press. The good news is that they’ve improved the front end:

In the improved online application, account creation is completed on one, long screen, instead of using a separate screen for each section,” the administration said. “This requires fewer clicks and makes the account creation process simpler and faster.”

The new application has a feature known as backward navigation, which allows consumers to change information entered on previous screens. The old application did not have this capability, so consumers often had to start over if they wanted to correct an error.

That’s amazing, really. I had no idea the old application didn’t have a back button. And nobody noticed that and they launched anyhow. Odd.

Times buries lead: Potential for Corruption in CMS ObamaCare Spending

Times did bury the lead. Here are the final three paragraphs of the story:

The Government Accountability Office, an investigative arm of Congress, raised questions on Monday about financial management of the federal insurance exchange and related activities. The auditors said in a report that they could not verify the amounts spent on staff salaries, advertising, travel, public relations, polling, focus groups and conferences.

The new secretary of health and human services, Sylvia Mathews Burwell, a former White House budget director, has described improved management as one of her top priorities. But the department disagreed with recommendations from the G.A.O. about steps she should take to track spending and report more accurate data.

“More” accurate data? Or any data at all

The auditors tried to determine how many federal employees had been shifted from Medicare, Medicaid and other programs to work on the insurance exchanges. Information provided by the administration “was not complete and was based on personal recollection unsupported by documentary evidence,” the report said.

And why would they have to be shifted? Oddly, the Times doesn’t ask; and we’ll get to one possible explanation shortly. Meanwhile, the mind boggles at the spectacle of department heads proffering personal anecdotes as a substitute for quantitative evidence in personnel matters. What is this, some kinda third world country? Wait, don’t answer that. Before we go on to look at the real story — the story the Times didn’t mention — let’s see what others have to say about the maladministration’s “general accountability” #FAIL. The Hill:

The Obama administration has spent at least $3.7 billion to build and promote online marketplaces under the Affordable Care Act, but it can’t prove exactly where it all went, according to an audit released Monday.

$3.7 billion? That’s almost real money, and a figure the world’s #1 newspaper somehow managed to airbrush out of its coverage, rather in the manner of the editors of the Great Soviet Encyclopedia airbrushing purged or executed figures out of group portraits with Stalin. From the report itself (PDF), a great slab of official prose that I will summarize, and yes, this really was one paragraph:

In order to make informed decisions regarding matters affecting the financial aspects of operations and the performance of programs, it is critical that decision makers have available timely and reliable information. This is particularly true as it relates to programs that have been subject to the significant degree of public and congressional scrutiny that has characterized the implementation of PPACA, including the CCIIO-related [Center for Consumer Information and Insurance Oversight] private health insurance and health insurance exchange provisions. However, CMS does not have documented policies and procedures governing responses to non-routine information requests, such as those that may originate from oversight bodies. CMS’s reliance on manual procedures and personal recollection resulted in an inefficient and time-consuming process to provide the requested information. In addition, because of the manner in which CMS accounts for and retains CCIIO-related financial management information, we could not determine the reliability of most of it. Also, because its process for obtaining the information and its review and approval of the information provided were not documented, there is no assurance that such procedures have been properly performed. Collectively, these issues increase the risk that significant errors may not be prevented or detected and corrected before information is provided in response to requests from Congress and other decision makers. Consequently, such users of these data may not have timely and reliable CCIIIO-related financial managementinformation, which could hamper their efforts to make informed resource allocation decisions and assessments of program performance.

Quite a beat-down if you translate. Shorter: Any number that the administration emits on ObamaCare is bullshit. Totally tainted bullshit that people, like, made up (because that’s what “personal recollection” and processes that “were not documented” mean). Can you imagine the footstamping and frothing that would come from career “progressives” and Democrats if the Republicans spent $3.7 billion dollars on their “signature domestic initiative” but couldn’t explain where the money went?

Times buries story: The ObamaCare Exchange’s Back End Systems Are Not Finished

But leave the obvious possibilities for corruption aside. Daniel Okrent of blessed memory once wrote, during his painful stint as the Times’s ombudsman public editor: “With very few exceptions, the longer you’ve been here, or the higher you’ve risen in the organization, the less likely you are to believe The Times is, or should be, the paper of record.” I couldn’t agree more. Because the Times didn’t just bury the lead. They buried the story. Here it is. The Hill:

The health insurance exchanges are set to re-open for enrollment in just two months. This countdown has the White House and federal health officials bracing to see if the system encounters any fresh technical problems.

How about the old technical problems?

Top Department of Health and Human Services (HHS) officials have also said that the back end of the site remains unfinished.

The mind reels. It’s like Amazon rolled out a spandy new shopping cart on the front end, but all the paperwork to handle your order was still being done on paper with typewriters and triple carbons instead of computers. And yes, that really is what’s happening. (Here we pause to remember that LBJ rolled out Medicare in 1965 to all over-65s, using punchcards and steam-powered mainframes, communicating by the US mail.)

The data hub routes and verifies information among the [Federal Marketplace] and external data sources, including other federal and state sources of information and issuers. For example, the data hub confirms an applicant’s Social Security number with the Social Security Administration and connects to the Department of Homeland Security to assess the applicant’s citizenship or immigration status.

In other words, it’s the back end’s job to make sure that data submitted by the “consumer” is consistent with the data available electronically from other sources, like the Federal government and the states. From a report by the Inspector General of HHS:

A marketplace uses the Data Hub to verify that the applicant’s information is consistent with Federal data sources, such as tax filings and Social Security data.

So, if when the back end stores data that is inconsistent, we are in Garbage In, Garbage Out mode: The impact for the “consumer” could range from a bad mailing address to not getting expected coverage at the hospital. It’s not even clear how the “consumer” finds out their data is bad, or how they correct it.

The Back End #FAIL Means Everything Is On The Honor System

The first thing to note — leaving aside for the moment the impact on consumers citizens — is that the ObamaCare back end cannot produce accurate billing data for the insurance companies. As a result, they’re invoicing the Feds for what they thinkthey are owed. I hate to quote Avik Roy, but since the career “progressives” and Democrats have zipped their lips before the mid-terms, I have to:

The back end of Healthcare.gov—where your payments to insurers are reconciled with your income and your health status—remains a mess. The White House continues to accept estimates from insurance companies as to what they’re owed, without any definitive knowledge of what companies are actually owed.

Wowsers. You may also remember from the ObamaCare rollout that enrollees were also put on the “honor system” for their eligibility information, and hence their subsidies. So the administration has created a system where enrollees can just say how much they should get, and insurance companies can just say how much they should be paid! Everything is on the honor system (until such time as the system actually does work — which, let’s be honest, it may never do; at least 50% of software projects fail, especially large ones (list) — and we have what Bob Lasweski calls “the mother of all reconcilations”)[2]. Look, if we’re going to go all “from each according to his abilities, to each according to his needs” on this, why not just admit the Communists are right and go for single payer? And for bonus points, we can junk this boondoggle of a broken system!

The third and final thing to note is where the back-end is failing. Some of the simpler functions are computerized; but more complex functions are still handled manually, on paper. And which functions would those be?

You will remember, of courses, that one of the most pleasant features of ObamaCare is that you must report “life events” that might affect your subsidy, which include: getting married or divorced; having a child, adopting a child, or placing a child for adoption; a change in income; health coverage; moving; disability; gaining or losing a dependent; becoming pregnant; tax filing status; and incarceration, among others. Well, as it turns out, the back-end can’t handle “life events,” so even if you submit your “life event” online, at some point the process turns to paper.

834 transmissions provide insurers with enrollment information for individuals from HealthCare.gov. It has been repeatedly reported that there are numerous errors in these transmissions with failure rates of over 30%.

As we do not process enrollments directly, we are unable to comment on the specific failure rate of 834 files. As I mentioned above, our plans have indicated there are improvements, but 834s in response to “Life events” still require manual processing to ensure accurate enrollment data and premium rates.

The U.S. Centers for Medicare and Medicaid Services (CMS), which operates the federal marketplace for consumers in 36 states, said the number of people with data problems is down from June when 966,000 had citizenship or immigration discrepancies and 1.6 million people had problem data involving income.

There was no word on how many more people might have data mismatches after enrolling for Obamacare coverage through 14 other insurance marketplaces operated by individual states.

And those “data problems” are all “life events,” right? Income, immigration, etc. So, since there are no good numbers (because the back end is hosed, see above) we can assume that “down from June” doesn’t mean much. Be generous, say a million 834s need to be processed annually; 14% of ObamaCare’s total enrollment, if you believe the administrations 7.3 million figure. (There are higher estimates.) That’s a lot of paperwork!

Obviously, as soon as open enrollment begins, people should affirmatively shop for new plans, and change to a better one, if possible. And those changes will be handled how? That’s right: By the 834s, placing more strain on an already strained system, just when it’s at the pointof greatest strain.

* * *

Of course, there’s a lot to be said for paper — even when processed by criminals like Serco, the UK firm Obama brought in to handle applications filed by mail. And it isn’t necessarily true that screens are more accurate than paper, at least for reading. But when you picture a workflow where a citizen enters data onto a screen, that data is then printed out and processed, no doubt by comparing it to other data, whether on paper or on screen, and then re-entered into a second computer to be passed on to the insurance company… Well, doesn’t that strike you as a little bit error-prone? Even prone to fraud, given that the processing will be privatized? Granted, it’s a jobs creation program, but shouldn’t a jobs program do something productive? Frankly, it reminds me of MERS, where a big truck would pull up to a warehouse loading dock out in the boonies at night and drop off a pallet of mortgage forms to be robosigned ….

And when a famously tech-savvy administration can’t fix a back end that was broken in December after nine months…. With the best tech talent in the world available to it…. Something just ain’t right.

[2] Because I can’t bring myself to cite a right-wing “scholar” in the body, I’ll cite them in a note, because AEI’s got it right:

The insurers are submitting monthly invoices to the federal government of the total subsidy amounts they think they are owed, and the Obama administration is writing them checks based on the invoices. For those who might worry about giving the for-profit health insurance industry a direct pipeline into the U.S. treasury, the administration says not to worry.It will all be reconciled later with actual, verified enrollment data, whenever the data becomes available from the still unbuilt “back-end.” What could possibly go wrong?

CONCERN TROLL PROPHYLACTIC If you got good coverage and care under ObamaCare, I’m happy for you; in a program that large, the odds were always that some would. Do you think all should have equal access to the care you got, and, if so, what are you doing about it?

About Lambert Strether

Readers, I have had a correspondent characterize my views as realistic cynical. Let me briefly explain them. I believe in universal programs that provide concrete material benefits, especially to the working class. Medicare for All is the prime example, but tuition-free college and a Post Office Bank also fall under this heading. So do a Jobs Guarantee and a Debt Jubilee. Clearly, neither liberal Democrats nor conservative Republicans can deliver on such programs, because the two are different flavors of neoliberalism (“Because markets”). I don’t much care about the “ism” that delivers the benefits, although whichever one does have to put common humanity first, as opposed to markets. Could be a second FDR saving capitalism, democratic socialism leashing and collaring it, or communism razing it. I don’t much care, as long as the benefits are delivered.
To me, the key issue — and this is why Medicare for All is always first with me — is the tens of thousands of excess “deaths from despair,” as described by the Case-Deaton study, and other recent studies. That enormous body count makes Medicare for All, at the very least, a moral and strategic imperative. And that level of suffering and organic damage makes the concerns of identity politics — even the worthy fight to help the refugees Bush, Obama, and Clinton’s wars created — bright shiny objects by comparison. Hence my frustration with the news flow — currently in my view the swirling intersection of two, separate Shock Doctrine campaigns, one by the Administration, and the other by out-of-power liberals and their allies in the State and in the press — a news flow that constantly forces me to focus on matters that I regard as of secondary importance to the excess deaths. What kind of political economy is it that halts or even reverses the increases in life expectancy that civilized societies have achieved? I am also very hopeful that the continuing destruction of both party establishments will open the space for voices supporting programs similar to those I have listed; let’s call such voices “the left.” Volatility creates opportunity, especially if the Democrat establishment, which puts markets first and opposes all such programs, isn’t allowed to get back into the saddle. Eyes on the prize! I love the tactical level, and secretly love even the horse race, since I’ve been blogging about it daily for fourteen years, but everything I write has this perspective at the back of it.

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26 comments

isn’t it possible that the exact same playbook will be in place once carbon legislation is enacted? ie: koch holdings minion co. claiming they’ve reduced their footprint by xx% and billing the fed for ‘carbon offset tax reduction credits’? likewise, to be audited at some future, yet never to arrive date?

I don’t think most carbon tax proposals work that way even in theory (which is not to say they are unable to be gamed because most everything can be gamed). I think most people concerned about carbon legistlation from a climate perspective favor carbon taxes.

Perhaps it’s the lack of coverage, but here in the Commonwealth of Massachusetts we have had ObamaCare 1.0 (formerly known as RomneyCare) for years. Our exchanges and procedures to sign up for insurance do not seem to be as burdened by huge problems like at the Federal level. Was there nothing to be learned from the Massachusetts example?

I think it says quite a bit because the states have built a built in regulatory environment. One much of state spending is monitored by federal agencies, by local governments because they need their share, and citizen groups can exert more direct power or force their concerns to be heard more easily.

There is more pressure for money to be spent efficiently. ACA’s rollout was an unmitigated disaster, but Obama went from publicly announcing how the website will work like kayak to revealing he just found out buying is way more complicated than that. When federal contractors waste money, they get more because the federal government can effectively print more. The states can’t and have often sold all the bonds they can sell. Congress isn’t doing its oversight, and federal agencies treat state and local complaints with contempt.

Of course, Obama has a hands off approach except to pick who he murders with drones, and so there is a culture that radiates from his administration of not seeing to projects (ex. the VA and Shinseki; we should really fire officers who advocate cosmetic uniform changes; those 1770’s British red coat uniforms had a purpose and we’re meant to be worn differently for field and parade). This culture has the ability to dismiss citizens groups, state government complaints, and even their own employees because the top, the White House, is so distant.

It’s worse than that. They took a system that was working and intentionally broke it:

Massachusetts had the first online health insurance marketplace in the country, created under its landmark 2006 law mandating coverage for most residents. The website worked well until it was revamped last year to meet the demands of the federal Affordable Care Act.

The new website was supposed to tell consumers whether they qualified for a subsidized plan, calculate the cost of coverage, and enable them to compare plans and enroll. It has not worked properly since it was launched in October, leading the state to encourage people to fill out paper applications instead. The flaws forced the state to enroll tens of thousands of residents in temporary insurance plans through the state Medicaid program.

You’d think such an epic screw-up would be front page news, along with the ‘back end’ issues that Lambert has been documenting for months now. But no … we’ve ‘moved on’ (according to the MSM), leaving a wake of dysfunction.

similar in VT. we had a decent health care system that covered everybody who could not afford to buy their own insurance, based on income. there was a state bureaucracy to deal with but it was not too bad. now obamacare has been forced in and what we had is gone.

a social worker i know recently told me she had a client who had enrolled herself following guidance from 2 different “navigators” both of whom gave her wrong instructions. i knew enough about the income eligibilities to tell my friend, this is crazy, she is in the wrong plan, you’ve got to tell her to call the vermont health exchange and tell them to fix it. it was weeks before my advice was acted on, at which point this woman had paid all the bills that had come in for health care and was, in my friend’s words, “drowning” (financially). she was paying way more than i do and her income is way less.

what is horrifying about this, and i had not thought of before, is how many people are enrolled in plans they can’t afford and don’t even know they are eligible for a plan that’s better for them? how many of them will think to go back and question their “decision”? one hopes she will get reimbursed everything, including the excess premiums and copays she’s paid out. how many hours will all that take to accomplish, assuming all that info. can be recovered? for how many people? and this is in tiny VT with a population the size of baltimore.

i have been told by a worker in this system that in actual fact, no one actually knows the law (including people who have actually read the entire 1,000-plus pages of the ACA), knows the regulations, understands what they mean, knows how the regulations are supposed to translate into implementation and rules on the ground, knows how and who will ultimately be liable or responsible for what, to whom. this is how it is behind the scenes and common knowledge among those who are working there.

it’s all going to “get sorted out somehow later”. just like with MERS. at some point, as they have with every robosigned mortgage, TPTB will simply decide it’s too big a mess to sort out, so “we’ll just have to ex post facto ratify the whole fait accompli” because the alternative is “a catastrophe beyond contemplation”. the insurance companies will get whatever they say they are owed, via a bailout if it comes to that, and those who have already forfeited their jobs and their homes will be asked to “sacrifice” one more time.

brilliant piece lambert. keep up the good work. it will make a great book at the right time to tell the whole sorry story, should you be so inclined.

In my youth (or rather, 12 months ago) I would have posted this article to Democratic Underground. Today, I’m not going to even bother. The hive-mind of the pom-pom bearers is so tightly closed, it would take a nuclear bomb to open it to any information that doesn’t conform to their Goldilocks scenario. And they shoot the messenger with disgusting regularity. Months later, when some version of fact starts to drill its way into the public consciousness, there won’t be any public apology, no mea culpa, nothing.

When the major party discussion organ is frozen solid in an untenable position vis-a-vis reality, there is neither hope nor change (all sarcasm fully intended). I can’t wait for the Hillary vs. Jeb election. I may have to emigrate.

sharing my personal experience, as the author has noted, there are people who have benefited from this (although i would claim we ALL have been hoodwinked on numerous levels, regardless if you are one of those whose coverage is cheaper and better), but i am not one of them…
1. live in florida, yeah, what an idiot for choosing a non-covered state to live in… *snort*
2. when i go on the ‘marketplace’, THE cheapest, shittiest, most useless bronze plan is about 1/4 my monthly take home pay (at 38k)…
3. PLUS it has a $6250 deductible, so short of something catastrophic, i will NEVER get ANY benefit from the ‘insurance’… (gee, why am i skeptical it will be smooth sailing if i *do* get a catastrophic level incident ?)
4. so, i get to pay 1/4 my take home every month, am not covered for checkups, etc, and then when i do get sick, i am out of pocket $6250 (about 3 months take home) until the insurance (supposedly) cuts in…
excellent…
(for me to poop on!)
AND we have a great big new loophole for future kongresskritters to require us to pay for whatever the hell industry they want to bailout next time… brilliant…
hating on the principle of the whole mess, hating the players, and hating the results…
what’s not to hate ? ? ?

The purpose of plans with huge deductibles is not to give you relief from common medical expenses. It is to make sure the hospital gets paid if and when you ever need one. You of course will still come out of the hospital (hopefully) owing that huge deductible to the hospital, but at least the hospital won’t be stuck waiting for you to pay for the bulk of the expenses you incurred. And yes, to make sure the hospital get paid, you will have to fork over 3 months’ take-home PLUS your premiums, unless of course your stay spans policy years, in which case you’ll fork out a total of six months’ take-home. Better to just destitute yourself, so you can qualify for Medicaid.

Dean Baker tirelessly reprimands the NYT (pathetic! Needs to reprimand “the paper of record!”) for throwing out really big numbers on budget issues when it comes to articles promoting the right’s agenda of cutting social programs. Really big numbers that are really much smaller when put in context (public editor Margaret sullivan did a story on this little problem).
Then here we have the NYT “airbrushing” out of the picture a substantial $3.7 billion spent on marketing for our insurance corporations.
And burying the story, fudging the numbers… Why hire reporters for this stuff when they could just print press releases.

Ultimately it all ends up as screw the citizen, er consumer, but never the insurance corps. Never the contractors getting shafted.

What we’re also discovering is that [making] insurance [very] complicated to buy [is just better for the folks running the insurance companies]. — Barack Obama

“If you got good coverage and care under ObamaCare, I’m happy for you; in a program that large, the odds were always that some would.”

Here’s one! And one of the incredibly ignorant people at the bottom that help make our corporate government possible:

“I’m tickled to death with it,” Ms. Evans, 49, said of her new coverage as she walked around the Kentucky State Fair.” (warehouse packer, earning $9 an hour, being treated for high blood pressure and Graves’ disease, after years of going uninsured…)

and (same woman): “Nobody don’t care for nobody no more, and I think [Obama’s] got a lot to do with that,”
then she said she would vote this fall for Senator Mitch McConnell “who is fond of saying the health care law should be “pulled out root and branch.”

and, last, “Born and raised Republican, and I ain’t planning on changing now.”

“What we’re also discovering is that insurance is complicated to buy. — Barack Obama”
let’s play pretend and imagine the rest of the quote:
We knew that letting people choose their own parasite was going to be difficult, but we think that the market is the best way for a single mom from Carbondale to figure out whether a tapeworm or a blood fluke or even guinea worm was best for her and her kids. And she can let the market work for her on healthcare.gov instead of having to wade through some pond on her way to school.

“Some of the simpler functions are computerized; but more complex functions are still handled manually, on paper. ”
Maybe that’s a GOOD thing. While paper can be lost, it doesn’t just vanish into thin air like electrons.

” So it seems odd they didn’t fix the back-end when they had their hands on the system”

I like Lambert’s implied answer (Cover-up!), but there’s another one: it isn’t actually possible. The program is a gigantic boondoggle, right? 1000 pages of legalese with who knows how many trap doors built in – by the insurers, who helped write it. It’s entirely possible that it’s too large a universe, or too self-contradictory, to be administered. In fact, that’s a likely explanation of the whole problem with Healthcare.gov.

Of course, the priorities are also revealing: they fixed the public part, that has direct political effects, but not the “back end,” which actually handles boatloads, supertankerloads, of money. Politics over management – but they also left the graft possibilities wide open. In the end, it may ALL be about corruption, one way or another.

Didn’t I hear, years ago, that the IRS couldn’t be audited, either? Dave Barry wrote a very funny column about it. Has that been fixed?

“1000 pages of legalese with who knows how many trap doors built in – by the insurers, who helped write it. It’s entirely possible that it’s too large a universe, or too self-contradictory, to be administered.” In the legalese of statutory construction, self-defeating provisions are said to “involve an absurdity”; Lambert has exposed, once again, that we are all involved in a big absurdity this time.

The new application has a feature known as backward navigation, which allows consumers to change information entered on previous screens. The old application did not have this capability, so consumers often had to start over if they wanted to correct an error.

Future versions of the application will also boast a feature known as ‘insurance,’ which will allow customers incurring medical expenses to be reimbursed for all or part of them in accordance with a set of plan rules. This will supplement the existing feature of removing money from customers’ bank accounts and transferring it to insurance companies, but is considered lower priority. No planned delivery date for this feature is available as yet.